FIN 535 FIN535 FIN/535 Accounting

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FIN 535 FIN535 FIN/535 Accounting

Conversion Costs:

in process costing are usually assumed to be added evenly throughout the process

The purpose of calculating equivalent units is toconvert partially completed units into the amount of completed output units that could bemade with that quantity of input

The weighted average process costing method calculates equivalent units bythe units completed in the current period plus the equivalent units in ending inventory

A major advantage of FIFO is:FIFO provides managers with information about changes in the cost per unit from one period to the nextOn occasion weighted average and FIFO methods of process costing will result in the same dollar amount of costs being transferred to the next department.

What would cause that?

No beginning inventoryAn error was made in the computation of the percentage of completion in the current year’s ending work in process. The error resulted in assigning a higher percentage of completion to each component of the inventory that actually was the case. Consequently, the following were misstated:

1. the computation of equivalent units

2. the computation of cost per equivalent units

3. costs assigned to COGS completed during the period

What were the effects of the error?

1. Overstated

2. Understated

3. Understated

What are transferred in costs in a process costing system?costs of the output of a previous internal process that is subsequently used in succeeding internal process

Why are transferred in costs differentiated from direct materials?

They usually consist of the basic units being produced

Which of the following would use a process costing system?

19 inch television

The distinct feature of the FIFO process costing method is that the:work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent unitsWhich of the followings statements is FALSE?

A. from the standpoint of cost control, weighted average is superior to FIFO because it controls all costs in work in process and not just current costs

B.the major difference between FIFO and weighted average is probably traceable to raw materials price flux

C. The major difference between weighted average and FIFO is the treatment of beginning inventory costs

D. From then standpoint of cost control, FIFO is superior to weighted average because it directs current period cots to current productionA

An equivalent unit of direct materials or conversion cost is equal tothe amount of direct materials or conversion cost necessary to complete one unit of production00:0201:34

Upgrade to remove adsOnly £3.99/monthTransferred in costs are treated as if they are:a separate direct material added at the beginning of the process in the computation of the cost per equivalent unit, the weighted average method of process costing considers, all the costs:entering work in process from the units in beginning inventory plus the costs for the work completed during the current accounting period

FIN 535 FIN535 FIN/535 Accounting

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